Will This Recession See Massive Layoffs?

From red-hot inflation to a strong jobs market, and all the negative gross domestic product in between, economists are divided on the health of the U.S. economy. A top concern for Americans: Are there layoffs on the horizon? Economists break down the data and economic indicator complexities brought upon by the Covid pandemic and the war in Europe.

More corporate leaders are anticipating a recession, according to a survey from Stifel.

Big companies are already announcing layoffs, including Best Buy, Ford Motor, HBO Max, Peloton, Shopify, Walmart and Wayfair.

Meanwhile, a survey from PwC shows 50% of firms expect to reduce their labor forces in the next six to 12 months.

This comes at a time when the labor market could hardly appear stronger. In July 2022, there were 11.2 million job openings, revealing a shortage of workers for available positions.

"I think it's very important to look at the number of job openings," Julia Pollak, chief economist at ZipRecruiter, told CNBC. "The question is how steeply they will fall, how sharply they will fall, if they go back to 7 million [job openings], the level before the pandemic."

Not to mention, the labor market is facing off against the "Great Resignation." In July, 6.4 million people got new jobs, while another 4.2 million quit jobs.

"The Federal Reserve is raising interest rates at this point in an effort to slow down the job market, and that's going to mean more layoffs," Zandi said.

Federal Reserve Chairman Jerome Powell said it will be a challenge "to return to an environment of stable prices without sacrificing the economic gains of the past two years" during a question-and-answer session at the Cato Institute, a Washington, D.C.-based think tank, earlier this month.

Watch the video above to learn more about how the U.S. defines a recessionary period in the economy, what common economic indicators are revealing and what may happen next in the labor market.

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Will This Recession See Massive Layoffs?

[elvismark]

Inflation is far more harmful to individuals than a collapsing stock or property market because it directly affects people's cost of living, which they immediately feel. It is not surprising that the current market sentiment is extremely pessimistic. In today's economy, assistance is critical if we are to survive.

[bobbymainz]

Things aren’t looking good stock market, banking system and transportation industry , a number of the most eminent market experts have been expressing their views on the severity of the impending economic downturn and the extent to which equities might plummet. This is because the economy is heading towards a recession and inflation is persistently above the Federal Reserve's 2% target. As I'm aiming to create a portfolio worth no less than $850, 000 before I turn 60, I would appreciate any advice on potential investments.

[erichkraetz]

As an elder millennial, one of the few advantages is having lived through the Great Recession. My advice. Reduce unnecessary expenses, increase your savings by investing in financial markets and do not sell. One thing I know for sure is that diversifying your income can help insulate you from much of the craziness going on in the world.

[andrewlogan]

As I would see it, the go to solution for climate this downturn and high expansion is momentary exchanging, rather than long haul exchanging, most people utilizing these methods are netting a lot of gains, sure the dangers are higher yet once more isn't the ongoing business sector similarly as unsafe?

[zoeytank]

Our time had reached its zenith, and it is now over. Everything, including 401Ks, are suffering from the recession and crashes. My $750K retirement equity portfolio is losing money. Because of inflation, I keep losing. Similar to how Rome fell under its despotic emperors, this world will also. I apologize if you are considering retirement but are concerned that your pension won't cover the rising expense of living. There are terrible foreign policies worldwide, as well as disastrous regulatory, fiscal, and energy policies.

[anthonymilner]

Today's inflation is a result of corporate avarice, not only problems with the supply chain. We know that the money obtained by the higher prices isn't being transmitted along the supply chain since businesses are reporting record profits. More pricing result in increased revenue for businesses, which stays with them and goes into their pockets. We can rule out supply-related inflation because of this. If your stocks are extremely weak, now is an excellent opportunity to take a battered 401k and convert it to a Roth. Then, your Roth will be tax-free, and you will just have to pay taxes on the substantially reduced current values.

[sebastianspiegler]

Here's how much Americans have saved at every age: Source: Vanguard's "How America Saves Report 2022". According to this, the median amount that people 65 and older have saved for retirement is $87, 700. Which means if they live to be 85, they will be living on $4, 385. I don't know about you but I'll need more than that.

[Tential]

Job openings doesn't mean people actually HAVE to fill those roles. Companies have job openings for years... The way this data is calculated is borderline demented.

[checkforme]

With all this scary news making the headlines, is this really a good time to buy stocks? I know everyone says the mrkt is ripe enough for buying but will stocks tank further this year? How long until a full stock recovery? How are other people in this mrkt raking in over $250k gains within months, I'm really just confused at this point.

[davidnewbury]

No worries for me, I don't try to time the market. When I see that stock drops below its fair value with some margin of safety - I buy. Past 2-3 months have been huge shopping spree for me. I've got literally like 2000$ left of investing cash. Probably I will miss some occasions in the future months, but who cares as long as I got value?

[lynnmckenney]

"We have twice the number of low paying, no insurance, part time job openings as we have workers looking for full time jobs that pay well and offer health insurance."

*Fixed it for you!*

[roseroland]

The average person has never been so poor. Millions of families are struggling financially as living expenses hit the highest levels in more than four decades. Over 60% of our country lives paycheck to paycheck and about 40% earns poverty wages. Even after working all their lives, more than a quarter of older people have no savings and many believe they will never be able to retire in dignity, while around 55% of elderly people try to survive on an income of less than €25, 000 a year. My primary concern is how to grow my reserve of €300k which has been sitting duck since forever with zero to no gains.

[philipanderson]

A recession (if at all it happens) will likely make the US economy to crash. But for stockholders, a recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time

[KingUnKaged]

Most people working full time these days are still broke, I can only imagine how much worse things will get when they lose their jobs as well...

[asheharris]

Cuts, yeah cutting jobs. Not cutting CEO pay. More money would be saved by cutting executive bonuses than by firing people.

[isaiahsaldivar]

The rich keeps getting richer and the poor keeps getting poorer, please tell us how to use this recession to make gains! grew my reserve of $110k to over half-a-million dollars between Dec. 2017 and Aug.2018, but the market is different now

[youtubelearning]

People are getting smart and going back to the old ways. They’re learning to live with less and discovering the things that truly make a person happy in life. Those things being free.

[jennifertarin]

I would say that at least half of those job openings are jobs that pay minimum wage or slightly above, are part time, temporary or contract positions. I see very few jobs (even in big cities like LA and NYC) that pay $20/hour or more for a mid-level job.

[adrianiglesias]

The job market is the last aspect of the economy to notice a recession; these people think we are stupid.

[IamCandiceKC]

Just because there are double the job openings to job seekers, does not mean those job seekers are all getting hired or getting roles they want. It could just be a sign of a very big mismatch in skillsets, expectations and other key factors between current employers and job seekers.